To be a "Rental Property", what to do? - Posted by PerlM

Real Estate Investing
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Posted by John SirJohnathon Grounds on July 07, 2001 at 15:30:59:

Perl,

You are talking about a “rooming house”. The first thing you will need to check is if your area has zoning. This will be a simple call to the zoning board listed in the phone book. Chances are, if you are still living in the house it is more of a “shared housing” arrangement and nothing will need to be changed.

As for the lender, as long as the home has been owner occupied (that means you) for at least 1 year, there usually is not a problem. You have the option to rent at your own discretion.

I would think hard about the separate room thing for the long haul. We have never had good luck with this method. It is usually best to rent the whole unit to a single person, and let them sort out the separate room issue. If you are near a college, find a single entreprenurial student to rent the house to, and let them make a couple extra bucks keeping things straight. This gives you one person to go after when the rent isn’t paid and the drywall is kicked in. :slight_smile:

Hope this helps,

John “SirJohnathon” Grounds

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To be a “Rental Property”, what to do? - Posted by PerlM

Posted by PerlM on July 07, 2001 at 14:05:55:

Hello there,
I am thinking of renting out each rooms separately to different ppl in a single family home with 4 rooms.
I’m curious if this is allowed and would appreciate some advice as I’m very new at this. Will I have any conflict with my lender (assuming if they ever found out)?

Are there any tax-issues involved or will i not be taxed on the rental-income? And last but not least, do I need to do some kind of “property registration” as rental property or is this unnecessary?

do i need to do anything for now if i also plan on living in one of the rooms at least until i can afford a better place?

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Re: To be a - Posted by Ronald * Starr

Posted by Ronald * Starr on July 07, 2001 at 16:52:46:

Perl M--------

That is how I started. I think you should not have much to worry about.

There is book on the topic written by a woman. Last name is Bierbier, I believe. Something very similar to that. Breibier?

You need to remain on good terms with your neighbors. If they do not like what you are doing they might complain to the city authorities and, if there are any violations, they will come down on you.

The major thing to keep neighbors happy is to not block them from parking where they want. If your house has a lot of cars, make sure some are parked out of the way, so the neighbors can park near their homes, or wherever they want to park.

The second thing is noise. Don’t disturb the neighbors with lots of rock and roll. Don’t have parties. Make your housemates take their parties elsewhere.

No junk around the yard where the neighbors can see it. No junker cars. Not running? Fix it immediately or sell it now!

When you interview potential renters talk about the rules and the cleanliness level required in the common areas. Discuss expectations about food sharing, meal sharing and work sharing. How much of a “family” are you trying to develop–what are the expectations of the occupants doing things together such as entertainment, trips, restaurant meals? People have very different expectations. Put together those with similar expectations.

I found that I should never rent to a person who I felt “so-so” about. If I could not say “yes” with some enthusiasm, then I had to say “no.” This is not to say they are “bad” people or bad renters. They are just a “bad” fit for me.

Taxes? Well, just do what is required with any rental property. Keep a record of expenses and income. Use the form E and fill it in. You can depreciate part of the property which is rented out, a great tax savings.

Good InvestingRon Starr****